Corporate anorexia: a dangerous epidemic

USA Today (Society for the Advancement of Education), July, 1996 by Timothy R. Carpenter

With companies downsizing to appease stockholders, American workers' hopes and dreams are being crushed.

THE FRONT-LINE employees who represent business in America these days seem newer, and fewer, than ever. The customer interface with business too often is a pre-recorded, computer-generated, joyless frustration. The slogans and mission statements promising quality remain, but the actual delivery is left to untrained new hires with lower pay and benefits. Experienced professionals are disappearing.

Corporate anorexia is the 1990s' response to business competitiveness. Anorexia nervosa is a serious disorder characterized by a pathological fear of weight gain leading to faulty eating patterns, malnutrition, and even death. Businesses driven by an obsessive compulsion for short-term efficiency can become caught up in a similar destructive pattern. Whether workers are laid off (downsizing) or managers are fired (a shake-up), it means the same thing--removal of a primary cost, in this case, people.

Why does this phenomenon occur? The naturalist's view is that a socioeconomic drama is being played out. As a result of the interaction of simple economic laws related to oversupply and international competition, a kind of social Darwinism is occurring with the most fit taking their rightful places in a new economic order.

There is another, slightly more cynical view that the current generation of business and government leaders finally is doing to the organization what has been needed all along. They righteously are declaring war on a despised, bureaucratic, staff-driven organization that always has been inefficient and self-serving. "It is time to return to business basics. Throw the rascals out!," they cry.

These explanations seem sensible, but can a healthy regimen become a dangerous fetish? At first, cuttings and sackings are reinforced when profitability soars. The quick-fix results from business process re-engineering (BPR) projects are one explanation for the current frenzy around this anorexic fad. All too frequently, though, the restructuring/realignment of work that follows BPR is done poorly, sometimes with breathtaking incompetence. Customers encounter the survivors of these purgings who have taken up the extra burden of work.

Surviving managers are motivated by naked fear as they continue the search for unrealistic perfection. It has been proved through biofeedback that emotions, such as fear, have a direct impact on the body and, ultimately, one's state of health. Meanwhile, more reductions are sought in the quest for leaner and meaner operations.

When the downsizing buyout offer is made, some of the brightest take the money and run, leaving gaping holes in the structure. Too often, when this happens, the "guts" of the organization are lost. The people with the keys to customer relationships and the road maps that guide organizational patterns are gone. In some organizations, downsizing seems to feed on itself, breeding the desirability of more cuts in a vicious cycle that eventually can lead to a death spiral.

Is there a way to prune without starvation? Diet and exercise alone will not create the structure needed to cope with the demands of mass customization. The organization and its people must be aligned with the strategy. Corporate behavior must be consistent with new standards of empowerment, responsibility, accountability, and innovation. In many cases, corporate downsizing focuses on financial figures instead of on a holistic view of the organization.

Anorexia, whether it be human or corporate, is a disease, not a cure. Corporate anorexia is a fear-and-denial-driven, dangerous reaction to often real competitive threats. In the final analysis, the status quo may be improved, but temporary gains are, after all, just temporary. Cutting and slashing without adequate restructuring of work must be replaced with common sense. The objective of reorganization is to reprocess the work to provide more customer value and productivity, not simply to eliminate jobs. When a new hierarchy of process replaces the old one of power, the organization can be more efficient and effective in meeting the challenges of world competition.

The outmoded notion of a vertical organization is seen as fatally inadequate to cope with new and more challenging markets. Perhaps this is correct, but it is like converting your favorite horse to the commodity status of refined glue. Yes, it can be more efficient and profitable, but who or what will replace the horse?

Unhappiness with the current state of things is as old as the Garden of Eden. There is little doubt that many business organizations have evolved to a high order of almost comical inefficiency. Since World War II, various revitalization programs have attempted to improve how the organization functions. Improvement meant more, better, faster, cheaper, but the basic structure remained unchanged.

By the early 1970s, Western business leaders began to realize that the era of mass production had given way to lean production systems. They scrambled to adjust to new, tougher competition from emerging global competitors. The 1980s were spent in hot pursuit of the secrets of lean production.